Will Young Adults Sign Onto Obamacare?

If uninsured young Americans shun the new health plans offered under President Barack Obama’s healthcare reform law, it will be because the insurance costs too much and not because they don’t expect to need much medical care, according to a study released on Wednesday.

What uninsured young adults do when state exchanges created under “Obamacare” open on Oct. 1 will be one of the most important factors in determining the success of the president’s signature domestic policy achievement. If too few young people, who tend to be relatively healthy, sign up for coverage, then premiums might not cover the medical costs of sicker people who do enroll.

“Contrary to commonly held beliefs, young adults do want affordable health coverage,” said Dr. David Blumenthal, president of the nonpartisan Commonwealth Fund. The group’s study dispels the notion that young adults don’t think they need coverage because they feel invincible, said lead author Sara Collins.

Up to 82 percent of nearly 16 million uninsured young U.S. adults would qualify for federal subsidies or Medicaid under Obamacare, meaning that affordability is less likely to impede enrollment in health insurance via state exchanges, the study concludes. Those ages 19 to 29 will eventually enroll in large numbers, it predicts, without specifying how many years it could take.

That optimistic conclusion comes from what young adults do when offered an opportunity to buy health insurance through their jobs. In such cases, 67 percent took the coverage.

For those who declined, the chief reasons were that they were covered by a family member (54 percent) or couldn’t afford the premiums (22 percent). Only 5 percent turned down coverage because they felt they were unlikely to need much medical care.

That price, not feeling they will never get sick, is the main barrier to young adults buying health insurance, said Aaron Smith, co-founder of Young Invincibles, a non-profit that runs education campaigns and conducts research on issues important to 18-to-34-year olds. “Price is the biggest hurdle.”

The group was not involved in the Commonwealth study but has received government funding to help people enroll in Obamacare insurance.

THE MASSACHUSETTS EXAMPLE

The Commonwealth study also pointed to what happened when Massachusetts instituted healthcare reform in 2007, requiring -like Obamacare – that everyone have insurance or pay a penalty. In the first year, the uninsured rate for 19-to-26-year olds fell from 21 percent to 8 percent.

“Based on Massachusetts, there is reason to believe young adults will come to the (state insurance) marketplaces and sign up,” said the Commonwealth’s Blumenthal.

A greater barrier than affordability may be that very few young adults are aware that the new coverage will be an option in less than six weeks.

Confirming other surveys, a Commonwealth poll found that only 27 percent of the 19-to-29-year olds were aware of the state health insurance marketplaces. Awareness was lowest among the uninsured (19 percent knew about the marketplaces) and people with low to moderate incomes (18 percent).

Those groups are most likely to benefit from the federal subsidies available to help people with incomes less than four times the poverty level ($45,960 for an individual) buy policies on the exchanges.

The survey, with 1,885 respondents, was done in March, and young adults’ awareness may be higher now since several states as well as the federal government have begun advertising and marketing campaigns to tell the uninsured about the exchanges. The survey has a margin of sampling error of 3.2 percentage points.

The report also found that 15 million adults ages 19 to 25 (half of this age group) were on a parent’s health insurance policy in the prior 12 months, up from 13.7 million in 2011. Of the 15 million, an estimated 7.8 million got that coverage through the 2010 Patient Protection and Affordable Care Act, which requires insurers allow children up to age 26 to stay on a parent’s policy.

Partly as a result, the number of uninsured young adults dropped from 18.1 million in 2011 to 15.7 million in 2013.